Apple Pay’s Mac move: Less friction? No, but slightly less fraud

It was one sentence buried near the end of a long announcement from Apple about iOS 10, but it was perhaps one of the most interesting. “Apple Pay can now be used to make easy, secure, and private purchases on participating websites using Safari, in addition to paying in-stores and within apps.”

What this means is that desktops and laptops made by Apple will eventually (once developers take advantage of this capability, in the fourth quarter) be able to make Apple Pay purchases at participating e-commerce sites.

The ultimate significance of this to the world of e-commerce requires a trip into the details. It is a yin-yang look at reducing friction (it will decrease friction for some users for some purchases, increase it for others) and making e-commerce more secure.

On the “this could be an especially big deal” side are the retailers that have thus far agreed to participate, including Abercrombie & Fitch, Pizza Hut, Saks Fifth Avenue, ToysRUs, Kohl’s, Coach, Gamestop and Overstock.com.

But as we delve into how this works, the real problem emerges. For this to work, three elements have to be in place: an e-commerce site that installs the software on its servers, a user running Apple hardware and the Apple browser, and more Apple hardware connected to that first piece of Apple hardware. This is where the “this will make e-commerce more frictionless” argument starts to fall apart.

Let’s delve into that third element, the iOS device that needs to plugged into the Apple desktop/laptop. First, it needs to be a relatively newer iOS device so that it has the finger-scanning mechanism. That means newer iPhones and Apple Watches. Hold on. What about iPads? Apparently, they don’t count.

Although Apple Pay works on an iPad, it won’t be allowed into this desktop deal. Why not? Apple didn’t consider the user case to be there because it figured that someone with an iPad would use that instead of a desktop, not next to it.

That is undoubtedly true, but why make this deal more complicated by allowing only some Apple Pay-supporting devices and not others?

Let’s get to the core friction argument. The essence of the “less friction” argument is that shoppers will be able to surf to, let’s say, Abercrombie & Fitch and make a purchase and simply authenticate with a split-second touch of a finger, instead of pulling out a payment card and entering in all of those numbers.

That’s a fair argument. But it forces the question, “How often will that actually happen?”

We need to split all shoppers into two categories: those visiting a site they have visited before, and those visiting a site that they have never visited before.

This is where things get dicey. Many major e-tailers — and note that Amazon is conspicuously absent from Apple’s list — already have systems in place to give repeat visitors a faster, easier and, yes, frictionless experience. Amazon is big on one-click and already knows the payment card details and address and name of its repeat customers.

In short, how much of a reduction in friction will this deliver for repeat customers? That depends on how good the retailer is at making the experience effortless.

The big potential here is with customers visiting e-commerce sites that they have never visited before. Many of those are smaller and more specialized sites — and most of them are not supporting this program. For those that are, you typically need to do the onboarding process (type in your name, address and a few other items) before you get to the payments area. If the sites went to payments first, they could spare the shopper of all of that. Alas, they typically don’t.

On the “greater friction argument,” this is a sharp deviation from how people are used to buying online. Any new behavior is going to add friction. If this were more universal — for example, if Visa offered this for any merchant accepting Visa and sent the hardware for free to shoppers so they could scan their fingers — then the new more-secure behavior would be learned quickly.

As it is, though, this is going to impact a tiny minority of shoppers (those using Apple desktop hardware and a recent Apple Watch or iPhone) shopping at a tiny minority of retailers. And it will reduce the friction for those few people only after repeated visits — which many of those retailers would have done anyway.

That all said, this is still a good move, albeit a frustratingly small and incremental one. It will start to get transactions to authenticate biometrically, which certainly is better than what exists today. As in-store systems get more secure — with EMV, among other methods — fraud will increasingly go online.

At least for a handful of Apple users, that method will be met with a finger. Will it meaningfully reduce friction? No. Will it incrementally increase security? Slightly — and that’s a good start.

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